Motorola sees slight rebound in Asian celluar sales

BrenonDaly

SAN FRANCISCO (CBS. MW) -- Asian sales of Motorola's
MSI, -0.72%
wireless phones will reflect "slow growth" this year after declining in 1997, a company executive said Wednesday during a presentation at the NationsBanc Montgomery Securities
NB, +7.94%
Technology Conference.

"Sales of phones will be greater in 1998 than in 1997," said Jim Caile, who heads the cellular phone division for the Illinois-based powerhouse. But he cautioned "the level still isn't what we originally thought."

"There's still some uncertainty in select Asian markets," Caile said, pointing to Korea, Thailand, Malaysia and the Philippines. But he also noted those markets make up less than 10 percent of subscribers. The far-larger markets of Japan and China don't pose any "significant risk" to Motorola's operation, Caile added. That may be a boost to stock, one analyst said.

"Any improvement in the growth rate (in the region) would be taken as a positive by the investment community," said BancAmerica Robertson Stephen analyst Tony Robertson. Concerns about sales in the region helped drive down the company's stock to a one-year low earlier this month.

Motorola shares rose 3 1/4 to 60 1/8 in late trading.

Cellular revenue

Motorola gets just over one-third of its revenue from its cellular division, compared to about one-quarter for its semiconductor division. NationsBanc Montgomery Securities analyst Mark McKechnie said strength in these two units is expected to help offset weakness in Motorola's paging business.

Certainly, the wireless industry holds tremendous promise, as the number of subscribers is expected to increase 40 percent, to 280 million, in 1998. More than 450 million subscribers are expected by 2000, according to projections Caile cited during his presentation.

Asia has been a worry for many large technology companies, as the economic turmoil there pushes businesses and consumers to tighten spending. It also makes goods produced there less expensive when compared to prices of goods produced in countries with a strong currency, like the U.S.

Korean giant Samsung and Japan's Panasonic also make wireless phones, as do European players Siemens, Phillips and Acatel.

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